Hostess calls it quits, pickets leave bakery
There were no pickets walking the line at the Hostess plant on Monday morning.
“It’s over,” said Somerton resident John Phillips, who had worked at the Blue Grass Road facility for seven years. “They’re shutting the place down.”
He said Friday was the last day striking employees walked outside the Northeast plant where bread and donuts are baked. There were about 300 workers at the Blue Grass Road location. Some management workers were inside on Monday, said Phillips, who was there to try to collect some personal property from a locker.
Phillips, who had worked a bread production line, said the baker’s union called a strike in early November.
Had the union accepted an 8 percent pay cut and higher benefits costs, he wouldn’t now be out of work, he said.
Calls to the union and the company were not returned.
The last entry to a Web site the company set up was Nov. 21. It said it expects to retain 3,200 of its 18,000 employees, while it shuts down and sells off its assets. The company said 94 percent of its employees will be gone within 16 weeks and that the shutdown would be complete in a year.
Hostess said the strike “crippled its operations at a time when the company lacked the financial resources to survive a significant labor action.”
The company said it would close 33 bakeries, 565 distribution centers and 570 bakery outlet stores, and end about 5,500 delivery routes.
The leadership of the Bakery, Confectionary, Tobacco Workers & Grain Millers International Union said the investment firm that took control of the Irving, Texas-based Hostess Brands three years ago is run by “vulture capitalists” who have mismanaged the company, The New York Times reported last week. The union charged company executives got big raises while insisting union workers take pay cuts and pay more for benefits.
Hostess, famous for Twinkies and Wonder Bread among its 30 brands, emerged from bankruptcy in 2009 when Ripplewood Holdings, a private equity firm, took the company’s reins. The Times reported Ripplewood sank $130 million into Hostess, which it likely will lose.
Hostess management, the Times reported, insisted labor costs and work rules along with millions of dollars in worker’s compensation claims made the business unsustainable. The company went into bankruptcy again this year and got permission to liquidate its assets after the bakers went on strike Nov. 9. Last week, Robert D. Drain, a federal bankruptcy court judge, ordered a final try at negotiations, but when talks went nowhere, he OK’d liquidation of the company assets.
Phillips, who had been laid off three times during his first three years at the plant, said he expected another company will buy Hostess’ Northeast site and that it would be up, running and hiring within months.
“They’re going to shut down, open up in a couple months and say, ‘You wanna work here? There’s no union,’ ” Phillips predicted.
That’s probably what will happen, state Rep. Kevin Boyle (D-172nd dist.) said in an interview Monday. The Blue Grass Road plant is in Boyle’s district.
“You’ll see workers go back with lower wages and reduced benefits,” he said. That will be a repeat of what has been happening for decades, he said.
What happened to Hostess, Boyle said, is part of the broader economic story — the erosion of the middle class.
“We will become weaker,” he said, “if we allow the working class to become poor. ••
Reporter John Loftus can be reached at 215-354-3110 or email@example.com